In a bid to secure coal supplies for its fuel-starved plants in India, state-run NTPC Ltd, the country’s largest power generation company, plans to set up power projects in Kazakhstan so that it gets to import coal from that country.

“NTPC has proven capabilities of installing, operating and maintaining huge thermal power plants and we are very keen to replicate the process in Kazakhstan,” Murli Deora, minister of petroleum and natural gas, said last week at a high-level meet in Astana, Kazakhstan, where top officials of both India and Kazakhstan were present. “In addition, we are also interested in importing coal from Kazakhstan,” he added.

“The discussions (with Kazakhstan) are at a very preliminary stage. This is part of our plan to import around 15mtpa of coal,” Sharma added.

NTPC is facing an acute shortage of coal at its projects across the country. It has a total coal requirement of 125mtpa and plans to meet demand by importing 8mt in the current fiscal year. NTPC has a total capacity of 29,894MW of which 23,895MW is coal-based. Procedural and infrastructure delays have already upset the captive coal mining plans of NTPC, as reported by Mint on 11 October.

India has 256 billion tonnes of coal reserves of which around 455mt is mined a year. Coal shortages have become a cause of worry and according to the government’s Economic Survey 2007-08, coal production has decelerated from a high of 6.2% in 2005-06 (April-December) to 4.9% in the corresponding period in 2007-08. The Indian power sector has a current annual coal demand of about 390mt.

“While this may be the time to acquire coal assets abroad due to rationalized valuations, the long-term commercial viability of the entire supply chain must be established. This may include assessment of alternate arrangements of coal or power swapping, more so from countries that present bulk transport challenges. It may be of strategic interest for NTPC to invest there, in the light of nuclear fuel supply prospects,” said Dipesh Dipu, principal mining consultant with audit and consulting firm PricewaterhouseCoopers.

India is increasingly focusing on Central Asia due to the energy resources there. Kazakhstan is currently the world’s second largest producer of uranium after Australia. State-run Nuclear Power Corp. of India Ltd recently entered into a nuclear cooperation pact with Kazakhstan’s state-owned Kazatomprom.